Friday, September 5, 2014

What's a better investment? A mid-range bath remodel or stocks?

In this review of where people might invest their money, I'm not considering tax advantages of the investment strategy.  But the data sets below gleaned from data published by Qualified Remodeling Magazine have been repeatedly reported by other published sources including CNN Money, Kiplinger, Wall Street Journal, Consumer Reports and many others who cite the source for published industry data used by companies and inspectors in the home remodeling and building industry to estimate a mid-range bathroom remodel project (defined as a 5'x7' standard size bathroom including 4x4 ceramic tile floor, new one piece sink bowl and top, new standard toilet, new 30"x60" standard porcelain on steel tub, new tub wall surround with 4x4 ceramic tiles, positive temperature pressure balancing valve and shower head for the tub, ceiling light and paint on walls) at around $16,000 in South Atlantic Region around Washington, DC, Maryland and Northern Virginia where I reside.

My money would be on the bathroom remodel if it needs to be done.  The reason is because this exact same project 12 years ago only cost around $10,000, and the price has only gone up since then.  As home values rise again it is only going to go up even more from here.  I would only invest in good quality materials that will last a lifetime installed by good qualified contractors with an established track record.  Materials such as the closed cell non-porous Sentrel Bath System synthetic stone material which has the appearance and characteristics of natural stone without the need for any maintenance and comes with a lifetime warranty is where I would likely invest my money.  I might also consider investing in an acrylic bath and wall system that does not require any maintenance and comes with the Good Housekeeping seal of approval if I could accept the look of shiny plastic veneers on my bath walls at more or less the same cost as the synthetic stone material.

I might also invest in good quality tile craftsman that specialize in setting tiles who build beautiful mosaic patterns with porcelain, glass, natural stone and ceramics for a little more money.  I base it on the reasoning that if I plan on selling the home, I am going to recover almost 99 cents on every dollar invested in the remodel project based on industry data in my Washington, DC region.  Over time, I can actually see the value APPRECIATE for a gain if the work done lasts and looks good 12 years later and is covered by manufacturer's warranty!

It is interesting to note that during the greatest recession in our country's history since the Great Depression, the cost of bathroom remodeling actually went up or stayed the same rather than going down, while stocks lost value by almost half over that same 6 yr period measured.  Over time the same stock picks recovered and returned almost 40% over a 12 year period, so there is great gains to be had in stocks vs the more modest return on investment of only around 11% gain or appreciation on the investment in the bathroom remodeling project.   However, the bath remodel project didn't really have any risk associated with it in the short term.  So if getting a value with less risk is something that matters to you and makes you feel better in terms of maintaining your living space, I'd recommend the bathroom investment.  If you don't want to see the value of your investment dollar risked on something that could lose value by almost half, then the safer bet is in the bathroom remodel project.

To find a qualified remodeler in the Washington, DC area that can install any material you want and build a bathroom for your to your exact specifications and is licensed, bonded and has an A+ rating with the DC, MD, VA region's Better Business Bureau, visit for more information.

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